Embattled PG&E to file for chapter 11 bankruptcy

CBS SF- Less than 24 hours after the company’s CEO stepped down, Northern California’s largest utility company — Pacific Gas & Electric — announced Monday it was going to file for Chapter 11 bankruptcy.

The company’s intent to file voluntary bankruptcy proceedings on or about Jan. 29 came in a one paragraph statement.

“PG&E expects that the Chapter 11 process will, among other things, support the orderly, fair and expeditious resolution of its potential liabilities resulting from the 2017 and 2018 Northern California wildfires, and will assure the company has access to the capital and resources it needs to continue to provide safe service to customers,” the company said.

The utility may face up to $30 billion in damages from devastating wildfires in California over the last two years. Investigators are looking closely at whether PG&E’s equipment ignited the Camp Fire, the deadliest fire in California history.

Over the last several months, shares of the utility’s stock have tumbled on Wall Street. Shares of PG&E plunged 55% in initial premarket trading following the filing and was still down 40% shortly after 5 a.m. PT.

The company said Monday that it has only about $1.5 billion in cash and cash equivalents on hand.

It said it believes bankruptcy is “appropriate, necessary and in the best interests of all stakeholders, including wildfire claimants,” as well as other creditors, its shareholders and customers.

Gov. Gavin Newsom was quick to respond to the bankruptcy announcment, issuing a statement early Monday.

“PG&E provides gas and electric service to 16 million Californians,” he said in the statement. “From the moment I was elected, I have been closely monitoring the impact of PG&E’s existing and potential future liability for the deadly wildfires on the victims of the fires and the consumers who rely on PG&E for their electric and gas service.”

“When I took office one week ago today, I immediately instructed my team to meet with the California Public Utilities Commission, CAISO, PG&E, and labor unions representing the workers who work for PG&E. My staff and I have been in constant contact throughout the week and over the weekend with these stakeholders and regulators. Everyone’s immediate focus is, rightfully, on ensuring Californians have continuous, reliable and safe electric and gas service.”

“While PG&E announced its intent to file bankruptcy today, the company should continue to honor promises made to energy suppliers and to our community.”

PG&E CEO Geisha Williams stepped down from her position on Sunday.

The company’s board of directors has named John Simon Interim Chief Executive Officer as the search for a new CEO continues.

“On behalf of the Board, I want to thank Geisha for her service and her tireless commitment to our employees and the 16 million Californians we serve,” said Richard C. Kelly, Chair of the Board of PG&E Corporation, in a statement.

“While we are making progress as a company in safety and other areas, the Board recognizes the tremendous challenges PG&E continues to face. We believe John is the right interim leader for the company while we work to identify a new CEO. Our search is focused on extensive operational and safety expertise, and the Board is committed to further change at PG&E.”

Williams was CEO for less than two years, but she had been with PG&E since 2007. In 2017, she became the first Latina CEO of a Fortune 500 company.